Is AT&T preparing a new challenger to Netflix and Hulu?
On Tuesday the wireless company said it had entered into a new venture with former News Corporation president Peter Chernin for "over-the-top video services."
They're not talking specifics yet. But they're interested in the streaming video space to the tune of at least $500 million. That's how much money AT&T (ATT )and Chernin's media investment company, The Chernin Group, said they had initially committed to the venture.
With the $500 million, the companies will seek to invest in video-on-demand channels and streaming video services. These may be supported by advertising, likeGoogle (GOOG, Fortune 500)'s YouTube is, by subscription fees, like Netflix (NFLX)is, or by both, like Hulu is.
For AT&T and Chernin, the unnamed venture is the continuation of a business relationship that blossomed last year, when they jointly tried to buy Hulu. While at the News Corporation (NWS), one of the companies that founded Hulu, Chernin was instrumental in the site's early success.
Ultimately, the owners of Hulu decided not to sell the site.
The Chernin Group has a majority stake in a smaller streaming video site, called Crunchyroll, which is known primarily for providing access to anime shows. That stake is part of Chernin's contribution to the new venture. AT&T and Chernin may seek to nurture other niche video Web sites.
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